Brazil: Why we love Black Friday and how it jump-started E-Commerce

Washing machines, dishwashers, vacuum cleaners – did you know that the need for electrical household appliances is one of the major driving forces behind the astounding success of online shopping on Black Friday in Brazil?

Although nowadays, Black Friday has become quite a global shopping phenomenon, let me tell you some particularities that make it an unequaled success story – and show how it helped revolutionize e-commerce in Brazil. This is why at the stroke of midnight between 23 and 24 of November, millions of my fellow countrymen will be sitting in front of their computers, smartphones or tablets – thrilled by the hunt for online bargains.

A very brief introduction to Black Friday

There are several different “founding legends” – but Black Friday, the last Friday of November and the day after Thanksgiving, has existed in the U.S. at least since the early 1950s. It quickly became the biggest shopping day of the whole year, with many retailers opening their shops very early, some right after midnight.

Black Friday quickly became popular because both sides profit: consumers are happy to receive huge discounts, and merchants are glad to rid themselves of their old stock so they have space and solvency – “get in the black” – to buy new Christmas stock.

Black Friday in Brazil is bigger than in the U.S.

Surprisingly, even though for us Brazilians today it would be difficult to imagine our country without Black Friday, it was only introduced to our country in 2012, and only in e-commerce (even though it has now also arrived at brick-and-mortar shops). And now, Black Friday is a much bigger shopping event than its North American version! Although the total Black Friday turnover is six times higher in the U.S. than in Brazil, the U.S. economy is also 30 times bigger.

#BlackFriday in Brazil: nearly 2 million online shoppers in 2016, a 15% increase in 2017 – and in comparison it is bigger than in the U.S.

So here come some details about Black Friday online shopping in Brazil:

Who and how many are shopping online?

Women make up 48% of the shoppers 52% are men – and altogether 1.95 million of them bought at least one product online during the 24 hours of Black Friday of 2016.

The average spending was 653 Brazilian Reals (R$) – which is approx. US$ 200 – and for the 19.8% of consumers who bought via a mobile device (i.e., via smartphone or tablet), the average spending was even higher at R$ 759 (about US$ 233).

What are the most popular products?

Apart from electric household appliances, also smartphones, clothes, electronic devices like TV sets and IT hardware are most popular (ranked by volume):

How is Black Friday online shopping evolving?

Online shopping revenues on Black Friday are growing impressively: While in 2015, 1.64 billion Brazilian reals (R$) were spent, in 2016 it had grown by 15% to R$ 1.9, which is approx. US$ 559 m. And for this year, the Brazilian e-commerce monitoring company Ebiteven expects another 15% increase in online sales.

This is amazing especially because the framework conditions seem less favorable: Brazilians don’t celebrate Thanksgiving and unlike U.S. citizens, they don’t have a day off on the following Friday.

Black Friday has now become so popular in Brazil that even manioc street vendors offer special discounts, as this Twitter user jokingly observes:

So why is it that Brazilians love Black Friday?

Here are the main three reasons for the great success of this only recently introduced shopping event:

1. Summer holiday pay puts Brazilians in a spending mood

Brazilians are in an extra shopping mood around Black Friday thanks to the traditional payment of the so-called 13th salary – an additional month’s worth of income paid by the end of the year, often in October or November. Summer breaks in Brazil last between 50 and 60 days, typically from late November until early February.

So when planning your summer holiday, there are many things you might need – a new photo camera, new bathing suits or maybe a surf board. An additional stimulus is provided by internet banking websites, offering their customers specific Black Friday loans or credits.

2. Cash-strapped consumers love bargains and are very forward-planning

Of course everybody loves bargains. But our country’s current economic and political situation has made Brazilian consumers reserved, they really watch their reals carefully. This is why Brazilians have been waiting to fulfill long-repressed shopping needs, waiting for real good discounts.

Due to its growing popularity as more and more consumers wait for the event, Black Friday has even stolen the spotlight from Christmas shopping and January sales. Interestingly, some retailers started extending the offers for the entire week, which some have dubbed as ‘Black Week’.

3. Brazilians are cautious and appreciate the transparency of online shopping

In the first years of Brazilian Black Friday, a few dishonest merchants tried to fool inexperienced consumers by rising prices just before Black Friday – only to then lower them in order to make people think they were receiving generous discounts.

However, many Brazilian consumers associations and NGOs are now monitoring the offers made by retailers, pretty well ensuring that products are actually sold at lower prices. And when shopping online, with just some mouse clicks, the different prices of different retailers become as transparent and comparable as never before.

Being in a holiday mood, a thorough pre-planning for major purchases and looking for both bargains and transparency explain the huge success of online shopping at #BlackFriday in Brazil

Black Friday, a powerful jump-start for e-commerce in Brazil

In Brazil, there are some peculiarities to remember when you want to be successful at selling online. Our country is huge, this is why the average time for delivery of products is eight days. Besides, many Brazilians don’t own a credit card and approx. 40% of them do not have bank accounts. This is why one of the most popular payment method is the Boleto, an official push payment method regulated by the Brazilian Central Bank, which works like a pro-forma invoice.

These are some obstacles faced by e-commerce – but Black Friday has significantly helped e-commerce to evolve in Brazil, it proved to be a very effective jump-start. In December 2016, Ebit CEO Pedro Guasti said: “As a direct consequence of Black Friday, the growth in the number of active online shoppers in Brazil has risen by 17% to 1.955 million. 281,264 of these are new users who made their first online purchase.”

This Statista graphic with data from Ebit shows the annual online shopping revenue in Brazil from 2011 to 2017 (in billion Brazilian reals) – from 2012 to 2017, there has been an impressive compound annual growth rate of 16.75% and a total growth of 116.89% for e-commerce in Brazil

Whereas in former times, many Brazilians only trusted their local brick-and-mortar specialist retailer when making larger purchases like washing-machines or TV sets, they have now discovered the charm of online shopping – including all its advantages: a greater choice as well as competitive and highly comparable prices. And this of course not only on Black Friday, but throughout the whole year.

This is why I’m looking forward to this year’s Black Friday in Brazil – and a very successful e-commerce year in 2018!

Subscribe to our monthly digest

Igor was the CEO of Wirecard Brazil (formerly Moip Payments) that helps entrepreneurs to receive online and offline payments. On this blog, he shared his long-term expertise and insights of the Brazilian and Latin American payment and e-commerce market.